The Veterans Administration told Congress yesterday that it would be a "tragic" mistake to merge the VA's separate hospital system into the general health care system of the nation, as several studies have recommended.

In a voluminous reply to the latest such recommendation, made by the National Academy of Sciences in June, the VA said its $4 billion system, flaws and all, is better for veterans, and cheaper for taxpayers.

VA Administrator Max Cleland, a Vietnam war amputee who has spent considerable time in VA hospitals, told a news conference that even when criticizing the system he now runs, "it has never occurred to me that veterans could be better served outside that system . . .

"I don't see the private sector out there feeling a compelling need to relate to several million warwounded," he said.

In detailed replies to 37 recommendations in the NAS study, the VA urged strengthening of its hospital system as a separate entity, while at the same time studying possibilities for increased cooperation with the larger national health care system.

The budget for VA hospitals is about 10 per cent of the annual federal budget for health care.

The NAS study, which took three years and $6 million to complete, said the VA medical program is wasteful, has too many acute-care hospital beds, encourages patients to stay too long, builds too many new hospitals, does not efficiently distribute services and sometimes jeopardizes lives of its patients.

But it also praised the program, saying that overall the VA provided good care, and had set high standards in some areas. It rated five of the 21 VA hospitals studied as outstanding.

The NAS study, mandated by Congress, noted that a national health insurance plan will probably be adopted in the next few years, and urged the ultimate integration of VA medical services into the regular health care system.

Specifically, the VA's reply supported NAS recommendations for:

Improved cost accounting systems that would allow the VA to be reimbursed by medical insurance plans.

Better systems for making sure that veterans occupying hospital beds really need to be there. Such systems, the NAS said, could cut the use of acute-care beds by 25 per cent in three years.

Improved services in psychiatric hospitals and for alcoholics.

The VA objected, strongly in some cases, to NAS recommendations for:

Serving more veterans by redistributing its existing medical resources.

Closing or converting the 33 VA hospitals with fewer than 20 applications per bed a year. "The current demand for care plus the future impact of the aging veteran population being served will require the continued use of these facilities . . ."

Performing cardiac surgery and kidney transplants in fewer VA hospitals to cut down on the higher risks involved where very few are done.

Eliminating some specialized and little used medical services, and buying them from non-VA hospitals.

The VA's point-by-point response to the NAS study was sent to the Senate and House Veterans' Affairs committees.

Cleland said his studies show it would cost taxpayers "substantially more" to care for veterans outside the VA hospital system.A new cost comparison study by the VA, he said, shows that on the average, acute care costs 10 per cent more in private hospitals.

A major point of disagreement was the NAS recommendation to reconsider the VA's plan to build eight new hospitals. NAS said there were indications that some might be underused, and that none should be built without the approval of local health planning agencies.

Cleland said there has already been adequate review of the plan to build the hospitals, which he estimated would cost $825 million. In cases where local health planners disagreed with the VA, he said."I think the VA has the ultimate right to decide."